Boston Consulting Group (BCG) growth share matrix was developed by Bruce

Henderson in the late 1960s. The BCG was responsible for the first analytical
step forward in corporate strategy (Collins & Montgomery, 2005). This simple
matrix allowed manager to classify each division, since renamed a strategic
business unit, into a quadrant based on the growth of its industry and the
relative strength of unit’s competitive position. (Collins & Montgomery, 2008).

 BCG matrix provides simply two-dimensional analysis on management

Strategic Business Units (SBUs); namely, industry growth rate and
relative market share. Industry growth rate is in the vertical axis, and
relative market share is in the horizontal axis. (Temmerman, 2011).
(figure1)
 The firm’s that use the techniques of BCG matrix, finds success in business
procedures. Hence, they consider it as the most famous and simple
corporate portfolio planning matrix as its provide a systematic method
for resource allocation decisions (Lu & Zhao, 2006).
 It assists the company to allocate resources efficiently. It can be used to
supply branded products, and develop the quality of the products
(Armstrong & Brodie, 1994; Boston Consulting Group,1968).

The capital gain can be calculated as follows (Udo-Imeh, Philip T, 2012)

MARKET GROWTH
The percentage growth in the size of the market, measured over a specific
period.

(The industry sales current year- The industry sales Previous year)×100
Market Growth =---------------------------------------------------------------------
The industry sales previous year.

MARKET SHARE
Market share is the percentage of the total market that the company controlled

RELATIVE MARKET SHARE

Expression of a firm’s or brand's market share against that of its leading
competitor.

Business unit sales (current year)

RMS = –––––––––––––––––––––––––––----
Leading rival sales (current year)
 20%
20%

10%
10%

0% 1×
0% 10× 0.1×

10× 1% 0.1×

Figure 1: BCG Matrix

Figure 2: Flow chart of BCG Matrix

Resources are allocated to business units according to where they are situated on the
grid as follows:

Question Marks:
 Question marks, which are also known as problem children or wild cats, are
business units being introduce in market that have a low market share in a high
growth market. They do not try to generate much cash in their industry (figure
1), (figure 3).
 They are called question marks, because it has yet to perform successfully and
the organization must decide whether to build up them by practicing a rigorous
strategy (market access, market development, or product development) or to
sell them, i.e., if they will become a Star or drop into the Dog. (Baker, M & Hart,
S. 2007)
 They have high demand and low profit due to low market share.
 The question marks may become dogs if they are ignored while huge
investment is made (figure 2). On the other hand, they have potential of
becoming stars and eventually a cash cow when the market growth slows
(Mohajan, 2015).
 Question marks have a tendency to produce new plant and equipment, low
capacity of utilization, top current asset levels, large R&D expenses, dear
marketing expenses, narrow domains, heavy new product activity, high direct
costs, and competitive devices that lag Star competitors on all fronts (Hambrick
et al., 1982).

Stars
 They are indicated by achieving a high market share in a rapidly growing
market (figure 1).
 Stars offer excellent long-term profit and growth opportunities. They also
consume large amounts of cash due to their high growth rate.
  They are the leaders in the business, but still need a lot of support for
promotion a placement. In this situation they create large sums of cash to
support strong market share. (Figure 3) (Baker, M & Hart, S. 2007).
 They have a tendency to make a large profit from their business. When the
market share becomes very large, the industry matures, and the market growth
rate declines; the star transform to a cash cow (figure 2) (Mohajan, 2015).
 Stars tend to have new plant and equipment, high capacity utilization, high R&D
expenses, broad domains, high sales per employee, high value added, and
superiority on a number of competitive devices (Hambrick et al., 1982).

Cash Cows
 They have a large market share in a mature period of a slow growing industry
(Thompson & Strickland, 1995). (Figure 3)
 They are called Cash Cows, because they generate cash in excess of their needs.
 They need very little investment, and create significant cash to utilize for the
investment in other business units (figure 1).
 The infrastructure of them can be improved by the investment. Hence, efficiency
is developed and cash flow increases. Many of today’s cash cows were
yesterday’s stars (figure 2). Although Cash cows are less attractive from a
growth standpoint, they are valuable in businesses (Mohajan, 2015).

Dogs
 They represent business units which have weak market shares in low growth,
or no market growth in mature industries. (Baker, M & Hart, S. 2007).
 They can neither generate nor consume a large amount of cash due to their weak
business strategy (figure 1).
 They are called Dogs, because of their weak internal and external position. The
businesses of Dogs often are liquidated, divested, or trimmed down through the
economization.
 They defines the product in the declining phase (Figure 3) (Baker, M & Hart, S.
2007).
 These business units face cost disadvantages due to their low market share.
 They have weak market share due to high costs, poor quality, ineffective
marketing, etc. (Mohajan, 2015).
 The business firms of dogs should be avoided and minimized in an organization,
and savings to turn Question Marks into Stars (figure 2).
 Dogs have a tendency to achieve medium capital intensity, dated plant and
equipment, low R&D expenses, narrow domains, high inventory levels,
moderate marketing expenses, low value added, and competitive devices that
lag Cow competitors on all fronts (Hambrick et al., 1982).
 Figure 3: BCG position throughout the product lifecycle. (Baker,
M & Hart, S. 2007)

Advantages of BCG Matrix :

 BCG Matrix is simple and easy to understand .

 It helps us to quickly and simply screen the opportunities open to us, and helps
us think about how we can make the most out of them .
 It is used to identify how corporate cash resources can best be used to maximize
a company’s future growth and profitability.
 If a company is able to use the experience curve to its advantage, it should be
able to manufacture and sell new products at a price that is low enough to get
early market share leadership. Once it becomes a star, it is destined to be
profitable.
 BCG method is applicable to large companies that seek volume and experience
effects.
 It provides a base for management to decide and prepare for future actions.

Disadvantage of BCG Matrix :

 BCG matrix classifies businesses as high and low to assess competitive position,
but generally businesses can be medium also. Thus, the true nature of business
may not be reflected.
 They focus on balancing cash flows rather than other interdependencies and
synergy.
 The BCG model has only two dimensions: market share and growth rate. Hence,
it ignores other dimensions of the business. (Morrison & Wensley, 1991).
From above all discussion we can understand what is BCG and where dogs come from
now turn to the actual argument that is dogs always dies. Here are my arguments:
Argument 1
Dogs always die because these weak product line drain firm’s finances and time
without giving profit in return.
The expense of caring a product line which is weak, that is one which is deteriorating
in terms of profitability, sales volume or contribution to the objectives of the company,
goes beyond production costs is a drain of the finances for the company. Also the weak
product tends to consume a disproportionate amount of management’s time. (Baker &
Hart, 2007). This kind of product generally involved short production runs in spite of
expensive setup times. (Philip Kotler, 1965) So the question for managers are whether
the investment currently being spent on keeping these products alive, could be spent
on making something that would be more profitable. The answer to this question is
usually yes.
For example Hunt’s a medium-sized canner, began to cut its thirty-some-odd lines in
1947. By 1958 it had only three products: food cocktail, tomato products, and peaches.
Within these lines, Hunt reduced variety offered. This simplification was apparently
very successful for Hunt. Its sales increased from $15 million in 1947 to $120 million in
in 1958.by that time it had the top brand in tomato sauce and tomato paste and was
second in peaches and catsup. (Philip Kotler, 1965)
After a survey one company with annual sales of $40,000,000 eliminated sixteen
different products with a total volume of $3,300,000. It also made a number of
improvements in methods of handling the product retained. Over the next three years
the company’s total sales increased by one-half and its profits by some twenty times.
Among the many factors contributing to these spectacular increases, top executives
have stated that dropping unsatisfactory or weak products was one of the most
important. (Philip Kotler, 1965)

Argument 2
Dogs always die because of Poor profit performance
Every weak product which lingers in a company’s line constitutes a costly burden
(Philip Kotler, 1965). A Weak product places a further burden on the company’s
facilities and management attention. (baker and Hurt 1988) Also it requires both
advertising and sales-force attention which might better be diverted to making healthy
product more profitable (Philip Kotler, 1965). Those products which offer marginal or
no contribution should be dropped or divested. (Onkvisit & Shawn, 1989). Devotion to
weak products may delay the aggressive search for replacements and threaten the
company’s future profit (Weckles, 1971).
For example-Maytag had held on its wringer washing for years without profit. The
sales of these hand-operated units peaked in 1948 and have since steadily declined to
account for less than one percent of the U.S. washing machine market. There is no
justification for may tag to continue making just a few dozen of these machines each
day. (Onkvisit & Shawn, 1989)
Texas Instruments like wise decided to discard such low margin products as watches,
appliance electronics, and some semiconductor devises. (Onkvisit & Shawn,1989)
Sunbeam similarly rid itself of such marginally profitable products as coffee makers,
toaster ovens, deep-fat fryers, and electric knives. (Onkvisit & Shawn, 1989)
Argument 3
Dogs always die because of Decline in market potential
Market share and profit are often highly related. As market share of a product declines,
usually so does profit. Declines of the market share and profit are often sign of fading
demand and increasing competition. (Onkvisit & Shawn, 1989)When the demand for
specific product faded, then the product die automatically.
For example-iPod Shuffle and iPod Nano The market for portable music players,
however, has slowed down in recent years, due to the increasing popularity of
smartphones. So Apple trimming down line of portable music players to just one
model: the iPod Touch. Hence they discontinued iPod Shuffle and iPod Nano on July
27, 2017 and iPod classic on September 9, 2014. (Richter, 2017)
Apple has been significantly updating both the product. Even then they couldn’t sustain
the product in the market.

Argument 4
Dogs always die because of Poor sales performance. Every weak selling product that is
permitted to linger in the line creates a burden of hidden costs, which may not always
be reflected in financial accounting report. (Weckles, 1971)

When a certain product gone through poor sales performance then the product line
dies anyway.
For example-Texas instruments, for instance, withdrew its complete home computer
line deu to unsatisfactory performance. (Onkvisit & Shawn, 1989)
Trump Steaks were launched on May 8, 2007; the product was discontinued after just
two months for sales failures. (Sauter et al., 2018)
Mennen, in its effort to get rid of marginal product, simplified its balm barr line cocoa-
based women’s skin care products by reducing the dozen varieties it had inits product
line and ended up with just four items. (Onkvisit & Shawn, 1989)
In 1998, Kellogg’s introduced Breakfast Mates but In August 1999, Kellogg’s announced
Breakfast Mates would be discontinued due to low sales. (Sauter et al., 2018)

Argument 5
Dogs always die because Poor quality/design
A weak Product is also damaging with respect to the future. Not only can it tarnish the
company’s image and promote dissatisfaction in the marketing channel, but also the
company may incure additional opportunity costs. (Baker & Hart, 2007)
This kind of product can cause customer misgivings and cast a shadow on the
company’s image. (Philip Kotler, 1965)
For example-In 2017 everyone was talking about explosive failure of the Samsung
Galaxy Note 7. It lasted less than a year in the market after Samsung had to recall
around 2.5million phones, due to complaints of overheating and exploding batteries.
(Sauter et al., 2018)
Argument 6
Dogs always die because of Brand overextension
Brand Extension, which basically means that an established brand uses its brand name
to launch new products to increase sales. Sometimes, brands overextend their reach,
introducing products that clash with their image and target demographics.
Hence, whenever a brand think of expand the business they need think about is it
logical fit with the parent brand. If not then the product line will die gradually.
For example When it came to pre-prepared frozen meals, Americans had plenty of
options in the 1980s. Perhaps because consumers naturally associated the Colgate
name with toothpaste, there was never much of an appetite for pre-made meals
bearing the Colgate logo. (Sauter et al., 2018)
Similarly Cosmopolitan is a popular women’s magazine, full of fashion advice,
dating tips, celebrity gossip, and horoscopes. What the magazine’s leadership was
thinking when they expanded the brand’s reach from the magazine aisle to the dairy
aisle remains a mystery. Few will likely remember the 1999 debut of Cosmopolitan’s
yogurt line, as the short-lived product was only available for 18 months. Like many
other products on this list, Cosmopolitan yogurt was a case of a brand reaching too
far beyond its area of expertise. (Sauter et al., 2018)
In 1989 Bic decided to launch a completely unrelated product to its brand - perfume.
The perfume two for women and two for men-Were packaged in quarter ounce glass
spray bottles that look like fat cigarette lighters. People were not impressed. Bic
removed the fragrance off shelves the following year, swallowing an estimated $11
million loss. (Keller, 2013)
1992 Bausch &Lomb introduce Bausch &Lomb Clear Choice, a colourless, alcohol-free
mouthwash. But Bausch &Lomb name, traditionally associated with contact lenses and
eyecare, was not easily transferred to mouthwash and the product was discontinued in
1995 (Keller, 2013). Another example is ponds toothpaste

Argument 7
Dogs always die because of Extent of Competition
Virtually all new products are designed to take market share away from established
competitors. In the case of a market where there are a large number of sellers for a
particular product, the buyer will have many alternatives. In this situation a weak
product always faded away.
For example- Pillsbury’s experience with its new cake mix. The new cake mix quickly
became the number one seller.it was so successful that that the company was able to
increase its market share to 21percent. But Pillbury plus soon fell to the number three
slot when General Mills and Procter & Gamble offered similar products and
outperformed Pillsbury because of its relatively small position in the food industry.
(Onkvisit & Shawn, 1989)
Friendster site’s users suffered through slow page loading times and the company’s
developers failed to scale up when the number of subscribers spiked. Ultimately,
competitors such as Facebook provided a much better user experience. Introduced in
2002, Friendster discontinued its services in mid-2015. (Sauter et al., 2018)
In both of these cases there is no capacity for the product line to be continued.
Arguament 8
Dogs always die because they Failed to satisfy the customers
If a product failed to attract there targeted cusmer there is no chance to be successful.
For Example In 2013, Burger King introduced a new menu item advertised as a
healthy alternative to their traditional french fries. Satisfries used a less porous batter,
which caused the fry to absorb less oil than regular fries during cooking. While
Satisfries were made with a healthier recipe, Burger King failed to convey the
difference to customers. The fries were also more expensive than Burger King’s regular
french fries, and failed to gain traction with consumers. The company discontinued the
fries in 2014, less than a year after they were introduced. (Sauter et al., 2018)
Over the 15 years leading up to 1985, Coca-Cola’s flagship cola drink had been losing
market share to Pepsi Cola. To compete, the company changed the drink’s formula for
the first time in 99 years -- but the move today is considered one of the greatest flops of
all time. New Coke was met with public outrage and lasted only a few months. The
company reintroduced its older formula, rebranded as Coca-Cola Classic. (Sauter et al.,
2018)
In 2000 Heinz decided to add an unexpected twist to their ketchup to catch children's
attention. They came up with Ez Squirt colored ketchup which came in three main
colors: teal, green, and purple. The idea wasn't meant to last on the market. After 6
years it was discontinued

Argument 9
Dogs always die because of Development of substitute product
Development of substitute product can cause product death. New product simply
replaces the old. (Hart’s, 1987) study showed this might occur as a direct or indirect
replacement.
Because of easy substitution, the steel industry lost a major market in beer cans to
aluminium makers. (Collins & Montgomery, 2008).

At the end of the above discussion I stick by my side that dog always die. A product is
much like a tree growing in a new forest. Some will die early while other will grow to
maturity. Those who survive, however, will not do equally well. The dominant trees are
likely to be the attractive one; they command attention and will be noticed by people
walking in the forest. Just like the attractive tree, a successful product is often a unique
one. But as young saplings turn into mature (and products get older), the older trees
face more problems- weather damage, disease, or being cut down for lumber (or in the
case of products, new technological breakthroughs). And sooner or later, old age does
catch up and the health of the tree will deteriorate.

The purpose of the above analogy is to demonstrate the changes faced by the trees or
product. Just like trees, products go through stages and in the end of the stage
eventually they die. Product have limited life –they are born at some point, may (or
may not) pass through a strong growth phase, and eventually degenerate or disappear.
(Philip Kotler, 1965) and as dog defines the product in the declining phase (Baker &
Hart, 2007) so they Always die.
Before leaving I want share the word of Sir Adrian Cadbury in 1984 are still true today:
if you put the same marketing effort behind a smaller range of lines, you can thus
afford to give better value to the customer and you can make up same value over half
the number of line
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